Buy vs. Build
Quantifying the value of building software in-house versus purchasing from an external proprietor is a longstanding debate, with many factors to take into account. Which is right for you will depend on aspects such as your business model, costs, resources, and more. To help with the decision-making, here are some important aspects to bear in mind.
Time to Value
Think about your business goals. What do you want to achieve? How long will it take to reach those if you were building software from scratch? This is one of the most important considerations to take into account when debating buy vs build. Simply getting to version 1.0 could take the best part of a year, so the likelihood of making headway on any goals is at least that far off. If you can’t afford that sort of lead time, buying is the right direction for you. You’ll be reducing your time investment to however long it takes to research and evaluate existing products and launching them internally.
Monetary Cost
Monetary cost is another important factor, for obvious reasons. Whilst building your own platform would require you to bear all financial costs plus any maintenance costs such as upgrades, bug fixes, introduction of new features and more, buying means the proprietor is responsible for all of these. Additionally, since they’re providing their platform to multiple clients, they’d be able to offer it to you for a fraction of the cost to build.
Maintenance
As well as the monetary cost of maintaining your own software, actually keeping your platform up to date with regulatory standards, user training, and other maintenance factors will require a dedicated team and management to oversee this ongoing project.
Opportunity Cost
Depending on your current resources, building in-house could mean employees are taken away from potentially high-value opportunities. Or, it may require hiring additional staff, thus adding further to the monetary cost. Purchasing a platform takes opportunity cost out of the equation, freeing up your existing employees so they’re able to focus on other, more profitable tasks.
